Apple And Facebook Earnings Could Be Indicators For the Global Economy

In the past decade, the growth in importance of the tech industry to the overall economy has only been outstripped by the amount of attention focused on the growth of that importance. Like any good, self fulfilling prophecy tech industry hype is almost impossible to escape.

In light of that realization we are heading into a very important week indeed. In the coming days we will see two of the most important companies in the tech industry release their earnings. These reports will shape the attitudes of investors towards the entire industry.

Apple Inc. (NASDAQ:AAPL) will announce its results on Tuesday – 24th July 2012. Though the company is expected to do well no matter what, investors will be anxious to see the actual numbers, in order to predict the future of the company. Many will be expecting Apple Inc. (NASDAQ:AAPL) to have outperformed guidance on their numbers.

In contrast, Facebook Inc (NASDAQ:FB), which will release its numbers on the coming Thursday, remains a complete mystery in anticipation of its earnings. This will be the first report since the company went public in May, making it of optimum importance to observers.

These companies, the heavyweight and the newcomer, are among the most visible in the tech industry. They are the companies that normal people care most about, and so, they are the companies that garner the most attention when their results are announced.

This means that whatever kinds of reports are released by Apple and Facebook this week are likely to be the only earnings reports that many people learn about for the next few months. It will inform the opinion of many about the economy and about the tech industry.

If Facebook beats all expectations, there will a reaction to the doom and gloom in the wake of the company’s offering. If Apple reveals a short fall, due to a drop in sales in China, there will be a more general feeling that China is not as much of a growth haven as it once was.

Facebook Inc (NASDAQ:FB) and Apple Inc. (NASDAQ:AAPL) will release earnings reports that will sway the tech sector, and in turn will sway the market. This is because the tech sector is the most exciting part of the economy right now, Facebook and Apple are arguably the companies most indicative to investors of the sector’s health.

Opinions will be cast about the entire economy from the small pieces of information that these companies make public this week. Those opinions might, in the minds of traders, go on to influence the economy itself, or will at the very least have knock on effects on consumer confidence, and November’s election result.

Most firms have to either break laws, or entirely collapse to have their financials reported on the news. Facebook and Apple are two of the only firms in the market that will have reports broadcast of their successes.

Heading into the week, it is worth slowing down and taking stock of the effect companies like this have on the entire market. Perhaps for Apple, the biggest firm in the world, it is forgivable, but Exxon Mobil Corporation (NYSE:XOM) rarely commanded such attention when it held the title.

Facebook’s influence, however, has helped stem the flow of tech IPOs, by birth into disaster in May, the company is the mark by which every tech startup will be judged by for a long time . That mark is to be set this week.

Both of these companies garner far more reports from analysts, and far more mundane news stories, than any other in the market. They are the ones that people pay attention to. The retail mentality leaking into investor behavior needs analysis.

That will not come this week, however. Both companies will release their reports, and conclusions will be draw from them, stock prices will shift, and in the coming weeks more reports will be released, taking the new data into account.

This is an inescapable cycle, though it is not one that has had any obviously detrimental effect on the economy yet. Perhaps it is a useful proxy, with which to judge the entire industry. It’s probably more accurate than the gut feeling telling me it is wrong.